Peter Sondergaard

A member of the Gartner Blog Network

Peter Sondergaard
Research Director
25 years at Gartner
29 years IT Industry

Peter Sondergaard is a senior vice president in Gartner, where he is the global head of Gartner Research. Mr. Sondergaard is responsible for people management and the direction of the global research organization, which includes Semiconductors, IT Infrastructure and Operations, Communications, Software and Services Management, Business of IT, Research Operations Management, and IT provider and end-user organizational roles.

What CEOs think of Digital Business

by Peter Sondergaard  |  April 14, 2014  |  Submit a Comment

This week we published the 2014 Gartner CEO and Senior Executive Survey. Among the key findings is evidence of a bullish attitude by CEOs and senior executives toward technology-fueled business growth in 2014 and 2015. The same bullish attitude can’t be said for investors in tech-related stocks recently.

What really caught my eye in this year’s survey is that IT-related issues, including mentions of digital, are much more prominent as key priorities for CEOs. Gartner Fellow Mark Raskino and his research colleagues who authored the report found that 7 percent of CEOs rank IT as one of their top priorities. This might sound infinitesimally small (as context, the broad topic of “growth” was ranked as the top priority for 33 percent of CEOs), but this supports the broader trend that our research organization reports, in addition to my own observations working with CEOs around the world.

CEOs are undoubtedly taking a greater interest in applying technology more aggressively in their organizations. In the survey, nearly 50 percent of the IT-related priorities that CEOs gave specifically mentioned digital, online, social, cloud and mobile. Overall, CEOs referenced technologies frequently associated with client facing and revenue generating programs.

Drilling a little deeper into the survey, CEOs increasingly reported their growing investment in front-office technology-related capabilities that are used to help in sales and marketing. The research also noted strong interest among CEOs in basing business operations in the cloud and in using data-driven decision-making via business analytics, big data and data science. Process-centric themes, which tend to associate with back-office efficiency uses of technology, are much further down the list where we see items such as business process outsourcing, dynamic business process management and electronic service enablement.

What does this tell us?

CEOs are making the transition to a progressive mindset of investing in technology to drive growth and away from only thinking about generating internal cost reductions and efficiencies with IT.

This level of engagement by CEOs with technology has probably not been seen since the late 1990s. As Mark notes, technology has always been visible in the last decade of Gartner CEO surveys, but not so far to the foreground as it is this year.

As any successful business leader will tell you, a great attitude and mindset will only get you so far; there’s got to be substance to back it up. This is at the heart of the challenge for CEOs. Many leaders are lagging behind in their understanding of what digital business means.

This is where the CIO comes in. CIOs must take the lead in closing this huge gap in understanding by educating the CEO, their board, executives, senior and middle managers on the transformative value of digital. A decade of believing that IT was a commodity function has left many business leaders with a very polarized—and increasing outdated—view of what technology can do to support organizations goals.

As I noted in an earlier post, CEOs see digital as a team sport and this survey indicates that the CIO still has the highest visibility in terms of opportunity to lead the charge. When Gartner asked CEOs who they would allocate relative responsibility for leading digital innovation and change over the next two years, the CIO came out on top. However, many other roles are heavily involved, including chief digital officers (CDO), so CEOs clearly see digital as a collective operating committee endeavor.

One of the key conclusions that Mark and our colleagues in research make is that expecting the CIO to be the prime mover in digital is a fairly sudden and major change of expectation and emphasis. Digital is strongly associated with innovation. Two years ago, the Gartner 2012 CEO survey found CIOs were low on the list of perceived innovation leaders because they were tasked as IT cost managers and service quality assurers. This is a huge shift in expectation and, as we all know only too well, change is hard—especially when it happens to you.

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CEOs: It Takes a Team to be Agile

by Peter Sondergaard  |  March 3, 2014  |  2 Comments

I recently participated in an event in San Diego with more than 80 global CIOs who represent some of the largest companies on the planet. I enjoyed sharing the conclusions from our recent CIO Agenda Survey with this senior community and we had an interesting discussion on the latest trends in technology, evolving business demands and the major opportunities and challenges facing CIOs. Here’s a short video clip from our discussion to give you a flavor.

With so much experience in the room, I knew I was going to learn a lot from their questions and the debate that followed. One issue that surfaced again and again for this community was the need for agility in the business. And not just agility within IT, or for specific projects in IT, but agility within the entire organization.

Sitting here in Connecticut, I can almost hear the collective groan of the blogosphere at the very mention of the word ‘agility’, but let me explain what I heard from these global CIOs and why it resonated with me.

Much of the discussion that took place focused on the need for agility within the entire organization to drive performance improvement, rather than just one part of one team being agile while the modus operandi of the rest of the organization is business as usual. The concept of two-speed IT, or bimodal IT as we call it at Gartner, was debated at length by global CIOs because, in their experience, it’s impossible to isolate the impact of innovation on just certain parts of the organization. In their experience, it’s not sufficient for just one part of the organization to be agile because every part of the organization has to respond to the requirements, changes and demands that result from innovation! If innovation is really to drive meaningful improvement, the whole organization, both IT and the entire organization, must be able to respond quickly and work together at the same speed to implement change.

So, if two speed or bi-modal IT is where we are today and there’s a need for organization-wide agility, what role can the CEO and CIO play to drive this change?

Agile starts with the customer and a competitive situation requiring agility; an outside-in approach to agile. Being an agile organization means realizing what Gartner calls Business Moments. Being agile does not start with taking an IT development methodology and then making it an organizational approach. That would be an inside-out approach to agile. In the digital industrial economy CEOs need their organizations to respond rapidly. CEOs need to articulate what being agile means and hold their organizations accountable for the change that is required to meet this goal.

CEOs are constantly asking their global CIOs to be increasingly responsive and to get ever-more stuff done faster. Call it agile, call it organized chaos if you like, but this challenge is not new; how to work faster, smarter, better. What is new is that you can not ask one part of the organization to be agile, the IT organization, and then not have the rest of organization act in the same manner. This was what several of the CIOs noted. They know their IT organization can become agile.

CEOs know they will be challenged internally by their organization’s culture and performance management systems, but their biggest challenge is to ensure the entire organization, not just IT, acts in a consistently agile manner.

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The Only Certainty Is Change for CIOs In 2014

by Peter Sondergaard  |  January 30, 2014  |  Comments Off

Earlier this month, a team led by my colleagues Dave Aron and Graham Waller published the results of Gartner’s annual CIO Agenda survey.

Overall, the survey revealed that CIOs do not feel prepared for the next era of enterprise IT, something we at Gartner call digitalization – The Digital Industrial Economy. CIOs responded to say that they often feel overwhelmed by the prospect of building digital leadership while, at the same time, renovating the core of IT infrastructure and capability for the digital future. The survey found that 51 percent of CIOs are concerned that this change is coming faster than they can cope and 42 percent don’t feel that they have the talent needed to face this future.

The survey, which was conducted in the fourth quarter of 2013 and represents the views of more than 2,300 CIOs in 77 countries, is summarized in a report we published for clients that highlights the need for CIOs to respond to the dual goals of effectiveness and digitalization.

The themes that emerged from the survey reflect many of the trends we we discussed during our Symposia around the world in October and November 2013 and will explore at our upcoming Gartner Symposium/ITxpo in Dubai.

Dave and Graham point out that during the first era of enterprise IT, the focus was on how IT could help do new ‘stuff’ — automating operations to realize huge improvements in speed and scale, while also providing leaders within the business with information they never had before. The last decade represented the second era of enterprise IT, an era of industrialization of enterprise IT, making it more reliable, predictable, open and transparent. But, while this second era has delivered real benefits for organizations, rigorous budget control and little appetite for risk has left little to no room for innovation.

Technological and societal trends, such as the Nexus of Forces and the Internet of Things, are changing everything in the third era of enterprise IT. Digitalization is not only improving what businesses do with technology to make themselves faster, cheaper and more scalable, but fundamentally changing businesses with information and technology, changing the basis of competition and in some cases, creating new industries.

The report points out that CIOs are facing all the challenges they have for many years, plus a flood of digital opportunities and threats. Digitalization raises questions about strategy, leadership, structure, talent, financing and almost everything else as all industries in all geographies are undergoing digital disruption.

I was also interested to learn from the survey that CIOs reported that a quarter of IT spending will happen outside the IT budget in 2014. As the authors note, this is probably a conservative estimate because this only accounts for the spending CIOs know about; the reality may be significantly higher.

Finally, Dave and Graham stated that there is an inherent tension between doing IT right and doing IT fast, doing IT safely and doing IT innovatively. Whereas the second era of enterprise IT has been all about planning and doing IT right, CIOs now need to deal with speed, innovation and uncertainty. This requires a concept we call bimodal capability, which means operating two modes of enterprise IT at the same time; conventional, or “safe and steady” IT, and a faster, more agile nonlinear mode.

In a future blog post, I’m going to explore what CEOs should know introducing a bimodal capability into their organization, and how to engage their CIOs in the shift to this strategic capability. Is this a journey you are already on? Have you started to address this fundamental challenge? I’d like to learn more about your experience for my next post.

If you are client, a detailed analysis is available in the report “Taming the Digital Dragon: The 2014 CIO Agenda.”

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Monetizing “Personal” Big Data – Second stage of Digitalization?

by Peter Sondergaard  |  December 28, 2013  |  19 Comments

Our behavior online, and even offline, as the Internet of Things becomes a reality, generates huge volumes of data. Huge! But whose data is it exactly? You might produce it, but who owns it? Who profits from it? Who currently stands the most to gain from it? I’ll give you a clue — it’s not you!

It’s true that we’ve started to unlock some of the potential value that is contained within big data. It’s also true that we, the consumers, benefit from getting better recommendations, discounts on other products we might like and deals customized to our preferences.

But this is nothing, absolutely nothing, compared to the value of your data to an enterprise today or in the near future.

Right now, in this first wave of what we at Gartner call the new digital industrial economy, we are giving this hugely valuable data away for very little in return. Discounts, offers, recommendations, deals.

But all this could change.

In the second wave of the new digital industrial economy, consumers will shift from being largely ignorant of their data’s value to being highly intelligent, protective and selective about how they collect and manage it.

In this second wave, consumers will be enabled and empowered to own and thereby monetize their own data, effectively wrestling back the control and driving up the value equation for themselves.                                                            

I know this represents a polar shift from where we are today — from companies aggregating and owning data to consumers owning and managing their own data and most importantly monetizing their data. And as is the case in most major changes, the reality will probably lie somewhere in the middle.

Regardless, the impact on the technology industry will be profound. It probably won’t be another Google or Amazon or Microsoft that comes along to challenge established leadership positions. It won’t be a bigger, better, fresher, newer version of these successful companies. Leaders in the new digital industrial economy will most likely be an organization, or even more likely somebody, completely different. When I say somebody, I actually mean us. That’s you and me, multiplied by a couple of billion individuals.  

Consumers will no longer be satisfied with trading their highly complex personal data for simple discounts. They will find ways to wrestle back ownership, and thereby control, of their own data. Their personal big data. They will have software that enables them to monetize their data.

The result? Consumers will have the power to sell, exchange or barter their data in return for products and services of equal worth. With this change, we will see the start of the next wave in the new digital industrial economy; A wave of change that will means everyone becomes a technology company.

We are conducting research into this field today to find answers to some fundamental questions. What or who will act as a catalyst for this change? How will consumers manage their data? How will the market or exchange operate to provide a platform for information to flow between the consumer and the provider? What new opportunities will exist for consumers, brokers, technology providers and industries of all types? And how will this shift impact established industries, providers and consumer behavior?

We look forward to this conversation continuing for some time to come, and I’m interested in your point of view. Do you already see demand for this shift? Do you see early examples of the transition of ownership taking place? Or do you think data will continue to be owned by the enterprise and that the current status-quo is too powerful to be threatened? I look forward to your comments.

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Which came first; the chief digital officer or the job description?

by Peter Sondergaard  |  November 26, 2013  |  1 Comment

New research recently published by my colleague Ken McGee examines how CEOs are typically hiring chief digital officers (CDOs). It’s hard to know what’s going on under the cover with internal direct hires and internal referrals, but he learned a lot by talking to senior recruiters about their experience working with clients.

Ken’s research is interesting on several different levels, but one aspect in particular really struck me. It is that many of the search requirements provided by clients lacked the clarity and certainty about digital business and objectives for a CDO that usually accompanies the specificity for virtually every other C-level executive search.

You probably just read that sentence twice. That’s right; CEOs don’t know why they want a CDO or what the CDO will do.

Hold on a minute there, CEO! More haste, less speed is needed here.

We believe that executive uncertainty about digital business and what they expect to gain from a CDO will likely result in valuable time being lost to any number of flawed CDO search false starts and failed outcomes. This will only aid competitors who already have a better understanding about their digital business strategy and the value that a capable and effective CDO can deliver to their enterprise.

So what’s a CEO to do? Put simply, we recommend putting the horse before the cart, not the other way around.

First and foremost, CEOs need to determine whether their enterprise should create a digital business strategy. This should be a key discussion within an existing enterprise-wide planning process that involves the entire C-suite or, alternatively, a separate planning program to kick-start the process of discovery thoughtfully. The outcome should be a definitive, declarative and board-ready position on what digital business means to their enterprise.

CIOs have a critically important role to play in this process. They should offer a briefing on digitalization that is specifically modified for each c-level executive and outline the potential implications that digital business could have on each senior executive’s area of responsibility. This is the foundation to building a clear understanding of the business need and the potential business value. This will, in turn, provide the foundation for a CDO search, based on definitive business requirements.

Until a business need and broad objectives are agreed, chief talent officers should strongly advise CEOs against commissioning a search for a CDO in advance of clearly defining the role.

After all, how can you find what you need when you don’t know what you’re looking for?

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No Easy Ride for CIOs and Vendors Alike in the New Digital Industrial Economy

by Peter Sondergaard  |  November 6, 2013  |  2 Comments

The new digital industrial economy will have a massive impact on major technology vendors. This in turn will create both exciting new opportunities and intense challenges for CIOs.

Most vendors will need to radically transform their offerings to remain competitive and relevant to their customers, many of whom will also digitalize their offerings in order to succeed. The pace of this change will be at the speed of digital and, as a result, we predict that many of the vendors that are on top today will be fighting for their lives tomorrow.

Why? Let’s take a step back so that we can see the future a little more clearly.

The top technology companies have reigned over the industry for long periods — a decade, sometimes even longer. But what they sold you in the past, and what they are selling you today, is not what you will need for the digital future.

On top of this, vendor channel strategy, sales force and partner ecosystems are being challenged by different competitors, new buying centers and changed customer business models. To add fuel to the fire, digitalization is creating accelerated technology-driven startup environments around the globe.

We know that most suppliers don’t dominate from one generation of IT to the next. Many of the vendors that are on top today, like Cisco, Oracle and Microsoft, will need to change radically if they are to retain their market leadership in the new digital industrial economy.

CIOs can see this coming. They tell us they expect different vendors to lead the next wave of innovation. Our latest CIO survey, the results of which are currently being analyzed for publication in early 2014, show that two-thirds of CIOs expect to change their primary suppliers by 2017.

Let me say that again: Two-thirds of CIOs expect to change their primary suppliers by 2017.

But there is some good news for vendors. CIOs will be spending more, not less, on technology in the foreseeable future. The challenge for vendors will be to offer products and services that meet customers’ new requirements, not fighting for a shrinking slice of a withering pie. For the year ahead, Gartner reports that the IT market is growing at a modest 3.2% annual growth rate. In two years, the combined IT and telecom market will hit nearly $4 trillion, or roughly 5% of World GDP.

Looking more deeply at IT spending, a couple of things that are important for CIOs and vendors alike stand out.

First, consumer technology spending is outstripping business and government technology spending. Annual spending on consumer devices will be four times that of business and government.

Mobile smart devices have taken over the technology world. By 2017, new device categories such as mobile phones, tablets and ultramobile PCs will represent over 80% of device spending. In fact, by 2017, nearly half of first-time computer purchases will be a tablet. To put this into context, this category barely mattered a decade ago.

So mobile will be your destination platform for all applications.

Second, the way CIOs need to look at data centers is also shifting. Right now the data center market capacity is about 80% private, meaning the servers and infrastructure in your data centers. That will shrink to 65% in just four years.

We are firmly in the era of cloud operations and the approach for private data centers has changed. About 20% of spending will be on hyperscale systems, using the model that the global cloud leaders like Google and Amazon pioneered, delivering massive scale.

Change is inevitable. We believe that accelerated vendor leadership changes are on the near-term horizon. These new leaders will drive a fundamental shift in the strategy of their organizations. As a result, CIOs will need to prepare — at least half of the strategic vendor relationships they have today will be with previously unimaginable new partners in the future.

We’ll talk more about these issues at Gartner Symposium/ITxpo in Barcelona, Spain next week. Will we see you there?

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The Digital Industrial Economy

by Peter Sondergaard  |  October 31, 2013  |  2 Comments

The digital world is upon us. Every budget is an IT budget. Every company is a technology company. Every business leader is becoming a digital leader. Every person is becoming a technology company.

Welcome to the Digital Industrial Economy.

If you’ve already attended Gartner Symposium/ITxpo in South Africa, Japan, US, India or Australia this week, you’ll recognize these opening remarks from our analyst keynote. And judging by the literally hundreds of CIOs I have spoke to over the past few weeks at these events, we’ve captured the attention, mood, hopes and, quite frankly, many of the fears of our attendees.

One of the questions we address directly in our opening keynote is about “digital” itself. Basically, what is it?

First, it’s not digitization. That is about zeros and ones. Digitalization is about something much, much more. Something altogether bigger and fundamentally more important. It’s about the transformation of your business.

Digital business applies unprecedented combinations of new technologies to generate revenue and value. It starts with digital assets and capabilities. 

For business, it means digital products, services and customer experiences conducted through digital channels from the front office all the way through the value chain. For governments, it means digital services to constituents, more transparency and higher mission effectiveness

Digitalization exposes every part of your business and its operations to the Nexus of Forces (where cloud, mobile, information and social technologies meet) and the Internet of Everything. It is how you reach customers and constituents, how you run your physical plant and how you generate revenues or deliver services.

No matter what business or service you deliver today, digitalization is changing it. The changes we see in media and digital marketing are just the beginning. If you work in agriculture, mining or manufacturing, digitalization means a new opportunity for you as well. If you deliver public services, digitalization allows you to better engage with your constituents where they are in the moment. 

And the way your business runs, your internal operations, are changing too as digitalization is becoming pervasive inside organizations, shortening time cycles. For example, to a chief marketing officer, what happens with a customer in the moment can make all the difference. S/he can commission a successful mobile app-driven campaign that sees payback in a matter of weeks. That’s the time it takes a typical IT organization to just gather requirements.

We are seeing the cost for the basic hardware building blocks of the Digital Industrial Economy, such as sensors, radios, and microprocessors are plummeting. In 2009, 0.9B sensors and 1.6B personal devices — so roughly 2.5B “things” — were connected. But by 2020, that will grow to become 30B “things”. In fact, by 2020 all products costing more than $100 should have sensors embedded, even if you don’t know what to use them for. 

Digitalization will change the way we all think about technology and, after talking to CIOs at Gartner Symposium/ITxpo across four continents in the last few weeks, it will fundamentally change the way we need to lead our organizations to be successful in this new digital world.

So if you haven’t attended Gartner Symposium/ITxpo in order to figure out what all this means for you and your organization, don’t worry. There’s still time to register for Sao Paulo next week and Barcelona the week after!

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Everyone is a Technology Company

by Peter Sondergaard  |  September 30, 2013  |  5 Comments

We are entering a new digital industry economy where everyone will be a technology company. How will you lead your organization to compete in this digital world?

Over the course of the next six weeks, this is one of the challenges we at Gartner will explore with more than 20,000 CIOs and senior IT executives as they converge from all over the world to attend Gartner Symposium/ITxpo in the U.S., Japan, India, Australia, Brazil and Spain.

If you’re planning on joining us, let me give you a sneak peek into one of the themes we’ll discuss during the event. If you’re not currently registered to attend, I hope to leave you thinking that you’d like to join us!

I have the honor of opening Gartner Symposium/ITxpo by delivering a keynote presentation, accompanied by several of my colleagues in Gartner research. It sets the theme for the event. In this year’s keynote, we’ll share that we’re on the threshold of a new era — a new era we call the digital industrial economy. It’s an era of profound change that will see every industry digitally remastered. The impact on CIOs, senior IT leaders and the IT organization will be colossal as the organizations they serve adapt to survive and grow.

Let me explain.

We see digital disruption occurring at three levels within the private and public sectors, at different paces in different industries. This disruption is being powered by what we call the Nexus of Forces, something we have analyzed in depth over the past couple of years. This is the convergence and mutual reinforcement of four interdependent trends; social, mobile, cloud and information (or big data, as others like to call it).

At the first level of digital disruption we see the use of ubiquitous cheap Internet-enabled sensors improving products, services and processes in a fairly linear manner. Think of this as the Internet of Things in action; sensors in your stuff that basically make them better.

For example, the use of SenseAware by FedEx to provide you with near-real-time information about your package as it travels around the world. Or the Smart Ball by Adidas. It’s a football (I’m Danish, so that’s the round ball you kick, not the egg-shaped one you throw) that provides players with information on how to improve their technique. I could also use the example of how a sensor on a diaper alerts parents of the need for a change, but in my experience babies already let you know pretty loudly when they need attention!

At the second level of digital disruption we see something more than just linear improvements from the use of digital technologies in existing products and services. We see business models fundamentally changing due to previously unexpected new entrants into established markets. 

For example, driverless cars by Google have the potential to radically change the automotive industry. Is the idea of buying a Google car so farfetched? And the impact of digitalized cars doesn’t just affect automotive manufacturers. If we’re not far from seeing driverless cars on our roads, what will it mean for the insurance industry? Will personal risk profiles for drivers mean anything when you’re not actually driving? What does this mean to your insurance policy? To insurance companies?

Another example a little closer to the here and now in this second level of digital disruption is the impact of Kickstarter on the venture capital industry. This is not a linear improvement in the VC industry — it’s a whole new competitor that was previously unthinkable just a short time ago.

But where we see the most radical change as a result of digital disruption is at a third level. This is where everyone becomes a technology company.

Everyone becomes a technology company?

Think about it. Hotel companies used to compete against other hotel companies by offering differentiated products and services based on technology. Remember when cards replaced keys and you could charge stuff to them? Cool, in a ‘90’s kinda way. Then along came Expedia, Hotels.com and others. They raised the stakes and changed the nature of the game, as customers were able to access competitive price information with just a click. But now hotel companies see a bigger competitor on the horizon and it’s more powerful than any fancy new technology feature or a new entrant into the marketplace.

That competitor is you, their customer. Everyone is a technology company!

AirBnB turns you, their customers, into their competitors. Got a spare room? Rent it out by the night. Last night, 40,000 did just that by renting accommodation in 250,000 rooms in 30,000 cities in 192 countries.

It’s not just hotels. Your car is sitting idle at the weekends or during work hours? Rent it out for a couple of hours with RelayRides. Need a loan? Skip the bank and borrow from each other. Prosper has nearly 2 million members that have lent over $600 million.

Getting the picture? A new digital industrial economy is emerging.

So you’re a CIO. You’re helping your organization compete by making it easier for your business to sell and your customers to buy. You’re probably even better than those other companies in your marketplace. But how will you help your enterprise compete when you’re not just competing against other providers, you’re now competing against your customers?

If you think this doesn’t apply to you and your organization, think again. Manufacture trains? You probably won’t see a left-field entrant from another industry compete with you anytime soon, but your biggest competitor now is probably your customer. It’s a commuter with a car who can now advertise a ride and connect with another commuter who prefers to pay per journey via her mobile device for a fraction of the cost of a ticket. The customer doesn’t care about SIC codes.

This is the challenge we will explore at Gartner Symposium/ITxpo. In more than 500 analyst presentations and during thousands of one-on-one analyst meetings and roundtables, we’ll provide attendees with the information, insight and advice they need to understand how these changes will affect their organizations, their industries and their roles and what it means to them to lead this digital world.

Are you coming?

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Digital Economy: Big Data, Skills and Education

by Peter Sondergaard  |  September 10, 2013  |  1 Comment

You’ve probably heard it many times yourself, but in my opinion very few quotes relevant to the IT industry measure up to the iconic words of Jeff Immelt, CEO of GE, when he said: “More people will graduate in the United States in 2006 with sports-exercise degrees than electrical-engineering degrees. So, if we want to be the massage capital of the world, we’re well on our way.”

Has anything changed since 2006? Everything and nothing.

Enrollment data for Science, Technology, Engineering & Maths (STEM) in the US shows that the growth rate was 8.7% from 2007 to 2011. But not everyone graduates from the course they start. Georgetown University estimated that out of the students admitted in the STEM degree courses only 62% emerge as a STEM graduate.

So STEM graduations are on the up, but at nowhere near the pace needed to meet the massive demand for their skills driven by the digitalization of business.

This has lead to a jobs crisis in IT today. Seven years after Mr. Immelt called time on the challenge we face to meet the needs of the IT economy, our challenges are only getting tougher.

Undoubtedly, Big Data is the accelerant being poured onto the fire under this burning bridge for CIOs. If you were one of the 6,000+ CIOs who attended Gartner Symposium/ITxpo last year, you’ll remember us stating that Big Data is creating big jobs. We predicted that 4.4 Million IT jobs globally would be created to support Big Data by 2015 but only one third of those jobs would be filled.

As stocks reduce and the fish get harder to catch, the net is getting wider and wider to satiate the CIOs hunger for talent.

Our recommendations then still apply. They were:

  • Begin now to retrain senior staff in advanced statistical analysis, information management and visualization principles. Even if they are not assigned to big data initiatives, being skilled in these concepts will be fundamental to success in the coming years.
  • Develop distinct business cases and evaluate their benefits, with costs for premium skills in mind.
  • Determine what new roles will be needed, and begin to train or acquire the information skills needed to leverage big data strategically.
  • Develop new hiring practices to recruit for the new nontraditional IT roles, such as linguists, artists and designers. Recruiters ought to be prepared for a dearth of candidates.

In our preparation for the upcoming Gartner Symposium/ITxpo series, we have learnt that CIOs in leading organizations are seeking to overcome this skills shortage by recruiting from a much broader field of talent. CIOs are finding the problem-solving and analytical skills they need for their organizations among biology and chemistry based graduates, most notably those found in the pharmaceutical industry. And even in other large economies where STEM graduation rates are higher, such as the UK and Germany with growth rates of 10.6% and 23.9% respectively, demand outstrips supply.

Long term, fishing in other pools for talent this isn’t a sustainable solution. It’s merely a stopgap that can’t possibly cope with the cataclysmic changes we face to adapt to the rapidly changing demands of our industry.

At Gartner Symposium/ITxpo this year, we will introduce the concept of the new digital industrial age. We will talk about the leadership, skills, resources and technologies that are needed to succeed as we enter this new digital industrial age. And we will share how we believe entire industries will be reshaped, digitally re-mastered in fact, and what it will mean to lead in the digital world. We believe this requires us—demands us—to fundamentally rethink how CIOs and their c-level colleagues face the future.

In my next post, I’ll share a deeper insight into these ideas and will ask for, and greatly appreciate, your feedback.

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Big Data = Chief Data Officer?

by Peter Sondergaard  |  August 15, 2013  |  11 Comments

There is an enormous new revenue opportunity for CEOs of asset-intensive industries to extend the value of existing products by unlocking and monetizing the data they create.

Got your attention?

Consider this example: An elevator company packages and sells the data it collects to landlords. An elevator company? Collecting data? Selling it? Talk about thinking outside the box! (Sorry, couldn’t resist.)

Think about it. The elevator company tracks how many people access each company on every floor in the office buildings it services. Once it pairs that information with publicly available financial data for those companies, the elevator company can then advise landlords on which companies will likely require additional floor space due to growth. On the flip side, the elevator company can alert the landlord about declining traffic to a particular office. If that information correlates with a decline in financial performance for that firm, it provides a warning signal that the tenant might be at risk of defaulting on or not renewing their lease. Insight like this is worth a lot of money to landlords.

How did the elevator company come up with the idea for this new product based on an existing asset? It wasn’t a spontaneous “aha” moment. It was the result of focused innovation.

Enter the chief data officer (CDO). The CDO’s job is to find new digital revenue from existing physical assets. The CDO guides the organization from not knowing what they don’t know about the data locked in their assets to actually doing something about what they know.

And I already know what you’re thinking. Another “chief of this and that?” Another title du jour that CEOs are expected to fund? Actually, no, not this time.

The CDO is actually best placed in direct support of executives already responsible for product development. That way, the CDO’s focus is locked squarely onto a specific asset or product. The CDO can unlock the value of data or information from the product or information that is related or valuable to the product. The CDO should also collaborate with peers throughout the organization to help the existing product development teams do what they do best: develop products.

Contrast this to the predicament that a shiny new CDO would encounter if reporting to the CEO: a hostile C-suite of peers resentful at the prospect of losing another source of innovation and revenue to the new-fangled title on the other side of the boardroom table. This all-too-often spells trouble, heartache and, frankly, disaster.

We advise CEOs to empower existing product leadership teams with focused talent that can find new sources of revenue from their assets, rather than set up another isolated C-level player who may fail in a power struggle for access to data.

Even though we recommend that CDOs, in most situations, should reside within the business units, CEOs must be actively involved in developing the priorities and objectives of the role. The CEO is ultimately responsible for the digital strategy of the organization and responsible for unlocking the corporate value of information in the organization. The CEO must own and drive the digitalization of the organization.

All this begs the obvious question from the CEO: I thought we were supposed to hire a chief digital officer? Is this some kind of CDO-bake-off? I’ll explore this in my next post.

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